Sanford Bernstein analyst Richard Evans said that pharmaceutical giant Merck's pipeline continues to be overvalued, but that Friday's sell-off "no longer renders it a significant outlier relative to peers." Evans said he sees risks tilted to the downside. Merck shares fell 0.3 percent.

Technology spearheaded the advance with software, Internet, semiconductors, hardware and networkers posting some of the loftiest gains. Biotechnology and airlines were also sharply higher.

Advancers outweighed decliners 2,423 to 839 on light volume of just under1.3 billion shares on the New York Stock Exchange. On the Nasdaq winners outnumbered losers 2,327 to 925 on volume of nearly 1.8 billion shares.

Gold was the market's only real weak spot. December gold futures closed below $392 an ounce for the first time in a week, skidding $4.50 to settle at $391.50 an ounce. See Metals Stocks.

Meanwhile, the dollar was up 0.7 percent against the yen at 109.43, while the euro was down 1.1 percent at $1.1772. Last week, the dollar touched an all-time low in euro trading. See Currencies.

Prices for U.S. Treasurys fell as stocks sizzled. A benchmark 10-year Treasury note fell 17/32 to 100 6/32, while its yield rose to 4.23 percent. See Bond Report.

There was no U.S. economic data Monday, but later this week investors will get a full plate, including a revision on third-quarter gross domestic product, home sales, personal income, durable goods and weekly jobless claims.

David Rosenberg, Merrill Lynch's chief North American economist, said investors are caught in a vacuum where the third quarter's profit season is past and the pre-announcement period is still two weeks away, so the data can be expected to take center stage. "If that's the case, then there may be quite a bit for the bulls to gobble on because the upcoming slate of releases should be growth-friendly," he said.

Focus stocks

Boeing
BA,
+11.46%
fired CFO Mike Sears "for cause," effective immediately. The dismissal is related to the hiring of a former U.S. government official, Darleen Druyun, who also was fired. Sears violated company policy by communicating with Druyun about future employment before she had disqualified herself from acting in an official government capacity on matters involving Boeing. See full story.

Boeing shares rebounded from early losses to finish up 3 cents at $38.89.

Microsoft was up 62 cents, or 2.5 percent, to $25.73. The software maker
MSFT,
+2.34%
and the European Union have stepped up settlement talks to resolve claims over antitrust violations, the Wall Street Journal reported Monday. The claims surround Microsoft's role in the server and multimedia software markets.

Citigroup
C,
+5.76%
was upgraded to "buy" from "hold" by A.G. Edwards, which said recent weakness in the financial giant's stock has provided a "reasonable" entry point. Citigroup shares were up nearly 1 percent to $46.74.

Wal-Mart Stores
WMT,
-0.45%
said November same-store sales are tracking in its growth range of 3 to 5 percent. In the past week, the strongest categories for the world's biggest retailer were food, pharmaceuticals, paint and automotive products. The Midwest and Northeast were the strongest regions. Wal-Mart stock was up 2.3 percent to $56.08.

Beyond the Dow, Time Warner
TWX,
confirmed that it sold its recorded music and music publishing business for $2.6 billion to an investor group led by Thomas H. Lee Partners, Edgar Bronfman Jr.'s Lexa Partners, Bain Capital and Providence Equity Partners. Time Warner will retain the right to buy back a minority stake in the business. The stock gained 2.1 percent to $15.87. Read more.

Campbell Soup
CPB,
-1.21%
reported first-quarter earnings 2 cents ahead of Wall Street's consensus estimate. Looking ahead, Campbell sees earnings of 52 to 54 cents per share for the fiscal second quarter, below the current average estimate of 10 analysts polled by Thomson First Call for a profit of 58 cents per share. For the year, it expects earnings of about $1.58 per share, a penny below the current analysts' consensus. Campbell shares added 1.5 percent to $25.57.

Optimistic investors

The UBS Index of Investor Optimism rose 24 points to 93 in November, marking a 20-month high as investors expressed renewed confidence in both the U.S. economic recovery and short-term investment goals.

The index, a joint effort of UBS and the Gallup Organization, indicated that 57 percent of investors surveyed are optimistic about the nation's economy in the short term, up from 43 percent a year ago and 50 percent in October.

According to the survey, 60 percent of those polled consider the economy to be in a sustained expansion or recovery, up from 48 percent last month.

Company

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